Why Natural Gas Is Considered an Overhead Expense
Natural and propane gas costs have risen sharply in the last couple of years. My booth requires 1,000,000 BTU’s for the burner, but I have been unable to offset the cost of running it because natural gas is considered “overhead.” Why?
Since the birth of the automobile, we have seen many changes in the ways vehicles are painted and products applied. We have also seen the evolution of spray booths since their introduction post-WWII. Then, air movement within the booth was important; contaminated air was forced out stacks and the cross-draft booth sucked warm air from the shop through filtered entrance doors, over the vehicle and out the filtered stacks. Air make-up units were then installed, bringing outside air in to replenish air taken from the warm shop. In Northern environments, weather could quickly drop the temperature of the shop air, which not only had an effect on the work environment, but also an adverse effect on the paint-curing process. Warmer air was needed. So furnaces were added to air make-up units.
Over time, paint products also evolved. In the 1980s, basecoat/clearcoat systems became the industry norm. Applications along with chemical design required a different environment to safely apply these products. Airflow over the vehicle now became a liability because of isocyanate. Booth design changed to downdraft. Clearcoat application required baking and these new booths also required quick high temperatures to achieve the goal. Immediately, the repair facility requirement changed and natural gas demands increased drastically to properly refinish automobiles.
Unfortunately, to date we have never made the adjustment to pricing to reflect these higher energy demands. Information providers have various rate categories within their estimating system—sheet metal, mechanical, frame, refinish, paint materials and sublet—that allow repair facilities to adjust categories based on the direct costs for that specialty. The use of natural gas in a repair facility environment is an “overhead expense.” But is it also a direct cost of doing business in a specialty area that has not yet been adjusted to reflect that?
As energy prices continue to escalate, so too will the direct cost of the required specialty in order to maintain cycle time. As the industry moves toward waterborne products—which should require less energy but also require proper ambient temperature during application—these costs should be appropriately adjusted.
Ray Fisher is the president of ASA-Michigan. This article represents his opinion and does not reflect the views of ASA-Michigan.